On Businesses and the ACA

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I appreciate the basic premises of the Affordable Care Act: the mandate for individual coverage and an insurance company inability to deny coverage to individuals with a pre-existing condition. Therefore, I look for these two points in any amendment or replacement.

There’s no question about the following:

  • Rising cost of health care insurance to all – including companies and individuals
  • Given a global economy, the company’s expense burden of healthcare insurance for employees is a burden many non-US competitors may not incur
  • The ACA requires employers (based on the number of employees) to provide healthcare insurance to employees
  • Over the past 10+ years, US employees have accepted an increasing cost burden of healthcare insurance

To me, the ACA’s employer mandate is an example of an unnecessary mandate and government overreach. Then again, given the Democratic majority that passed this law, I see it as another example of Democrats trying to do too much.

I offer a suggestion, and one that employees won’t like – but businesses would love. The Republicans won’t like it either because they couldn’t accept the two key points that I stated at the beginning. It’s also doubtful that Democrats would embrace the idea because it would amend what they created and they are less likely to pass the burden to individuals. In other words, it’s time to look outside the box.

Note: For the sake of this post, employees refers to full-time employees, which I define as those working 35 hours per week or more.

  1. Congress passes legislation to remove the employer mandate, thus companies have no obligation to provide healthcare insurance to employees.
  2. Therefore, given the ACA’s individual mandate, it is each individual’s responsibility to get healthcare insurance.
  3. In collective bargaining situations, the union and employer may negotiate coverage. If so, the burden of the negotiated coverage on the company and the employee is only with the employees covered by the collective bargaining agreement (CBA) (which is existing labor law).
  4. Outside of theCBA, employers would be
    1. under no obligation to provide healthcare insurance or Health Saving Account (HSA) benefits
    2. If the company provides any benefit of healthcare insurance or HSA to any employee, all employees not covered by the CBA receive the same package without exception. (That is, if the CEO gets something special, the same goes to all employees.)
    3. If the company decides to provide a fixed amount to all employees to go toward the cost of the employee’s healthcare benefits, that’s OK as long as the amount is the same for all.
  5. If a person chooses not to purchase healthcare insurance, they are fined at a price that is higher than the cost of insurance.
  6. Determining how to fund a tax credit for individual purchases would be a noble cause.

Yes, this would level the playing field for US companies in the global marketplace – and smart companies would boost salaries. On the other hand, the action amplifies another problem – the people of the US would be carrying a burden that other citizens in primary markets throughout the world don’t have – thus, a dilemma remains.

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25 thoughts on “On Businesses and the ACA

  1. I think it would be much easier to just go witj universal health care, Frank. Within your idea, giving the same amount to everyone doesn’t seem logical because health insurance is cheaper for those who are younger and those who are healthier. And by the way, the employer mandate in ACA kind of works how you described – an employer can choose not to give insurance to the employees and just pay fines. But if you remove these fines, you’ll see a lot more employers opting out of health insurance and dropping all the costs onto the employees. Also, since many currently covered employees don’t make enough money to actually afford healthcare premiums on their own (for a $12/hour full time worker covering a spouse and 2 kids, just the insurance premiums would be about half the salary) the government and the states would have to subsidize a lot more people.

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    • X,
      Good point about providing the same amount for all. I could settle on a proportional system based on age. Meanwhile, the rest of your points support my contention that the dilemma is far from solved. Couple that can the government afford to run a universal/single-payer system? … what a mess!

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      • The government already runs Medicare which covers about 10-15% of population, I think, and since these are mostly seniors, these are usually the most expensive patients.
        And then the government runs Social Security for everyone. So yes, I think it can be done.

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        • I’m glad you posted on the difficult conundrum of the ACA, Frank. I must say I agree with X in his comments, and particularly that universal health care would be a much better solution. If the Dems had had their way, that’s how it would have been, but that idea was DOA because of GOP opposition. We are the only industrialized nation in the world that doesn’t have it. In these discussions, we shouldn’t lose sight of an essential difference between the two types of healthcare. In our present system, providers are financially rewarded for through-put. A public system is rewarded for long-term results and penalized otherwise, as for hospital infections and hospital re-admittance. (The ACA has elements of this.)

          I saw a TV news segment the other night reminding me of this kind of difference. A somewhat-befuddled 81-year-old man had been sent home to his city apartment after hospitalization for prostate trouble. He was in a wheel chair and on oxygen. After a week, he had run out of food and was starving. Having no relatives nor anyone else to help, he finally called 911. (The operator herself went to his aid!) They said that the number of such people is growing rapidly, having increased 50% since 1980 – they are called “elder-orphans”.

          Under a public system, elder-orphans would be connected to a social safety net, but when it’s all about money, the present system usually ejects and then forgets them. I’m in favor of cutting businesses out of the loop for healthcare. After all, only about a third of people still get coverage that way and it’s shrinking. But any healthcare system that runs on money is problematical. Nobody shops for a hospital or a doctor when they need one. We are at the mercy of a system that has little mercy.

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        • Jim,
          Thanks for your thoughtful response … and one thing for sure, “conundrum” is a great word that describes this issue. The health care debate is too trivialized by many, but the many moving parts make it quite complex. … hence one of the reasons why I took the business tact on the issue is because a) it’s not a common view point and b) I know my readers would defend the people.

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  2. You raise good points, Frank, and I would say understand the issues much better than I do. Within my circle of friends this topic becomes so polarizing that I rarely have an opportunity to hear how it’s really working on a personal level, and I have to admit I haven’t given a lot of thought to employers, which is a bit shortsighted. California employers, and in particular those in Los Angeles, are facing so many struggles already with the quickly accelerating minimum wage requirements, so adding in the issues with ACA is probably tremendously burdensome. You’ve provided good fodder for some further investigation.

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    • Debra,
      Polarizing discussions that you mention are usually politically driven, thus seldom go beyond the shallowness of blah-blah-blah. The issue is very complex … and I admit my knowledge is shallow regarding the complexity … but with this post, I wanted to provide some fodder. 🙂

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  3. I just don’t understand your health care system in USA. Health care should be available for everyone at a reasonable price. From the outside it seems that if you don’t have money or a job, you don’t get health care.

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    • Debra,
      I’m not sure if I understand the system. For instance, 3 people getting the exact procedure/treatment at the same hospital on the same day by the same doctor could be charged 3 different amounts.

      One factor is that most hospitals are part of large corporations … thus there are very few public hospitals. However, their are rules for subsidizing care for the poor. On the other hand, some people have ways of abusing the system.

      In other words, it’s a complex mess.

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  4. A hardcopy of your well thought-out healthcare suggestions just went into my golf bag. It will provide an excellent set of ideas for me to refer back to after the U.S. Supreme Court delivers its latest ruling on the ACA, and after I continue to miss 4 ft. putts. I especially look forward to reading the comments from your readers, the first four of which I enjoyed this morning. One thing, I’m not sure I completely understand what you mean by either of the two points in your concluding paragraph: (1) “Yes, this would level the playing field for US companies in the global marketplace – and smart companies would boost salaries” and (2) “On the other hand, the action amplifies another problem – the people of the US would be carrying a burden that other citizens in primary markets throughout the world don’t have–thus, a dilemma remains.”

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    • Tim,
      The problem with your putts could be done to too much weight within the golf bag.

      Regarding 1) If employees are going to take on the employer’s burden, then employers should increase salaries beyond the meager 2-3% raise. 2) Even with this plan, of the industrialized countries wouldn’t Americans be carrying a greater cost burden?

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  5. Complex subject, but you put forward a good argument. However the elephant in the room (not the political party one) is the continued and unnecessarily high cost of medicine in the US.

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    • Fasab,
      I see your point, but I try to separate cost of care from insurance … but yes, they are related. Meanwhile, I wanted to float an idea because most focus on the people,, not businesses ….

      Liked by 1 person

  6. Several elephants in the room…but my favorite is the real reason for high cost : so called preventive medicine (fortune telling, abstraction, and drug pushing, in my book). Too many people go to the doctor too often, constantly testing, navel gazing, and trying to put off the inevitable. Preventive life style–taking adult charge of oneself rather than relying on “experts”— and acceptance of the tolerable imperfections in life would go a much longer way to better health than preventive medicine. Then medical resources could better serve those who truly need them. We do not need somebody else’s “health care”; we need sickness and catastrophe care.

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    • Cynthia,
      Yep … individuals also play a role in unnecessary care. Annual physicals are important … but are aspects of it unnecessary? Then again, the corporate side of medical care wants is all about income.

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  7. As far as the citizens carrying the burden is concerned (as compared to the citizens of other countries) the US citizen is not taxed at the same rate as other countries. There is no such thing as a free lunch and those countries where healthcare costs are not an individual responsibility the income tax levels (up to 90%) equalized this benefit. I like your plan, Frank. Now you need to figure out what to do with all the seniors currently in the retirement system. (I guess they could be grandfathered in the old and the Frank plan would apply to new workers)

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  8. Here is the problem Frank, many US citizens no longer have full time jobs. Many work in the grey market having lost their jobs to outsourcing. The cost of insurance in the free market is unpredictable and rising. Catastrophic costs still mean families could lose everything. Businesses would certainly choose to stop contributing, thus minimum wage workers would lose that one benefit that truly does benefit them.

    Truly what we need is Universal Health Care, raise our taxes to cover it the cost. Supplemental policies to be bought on the market. There are many nations that provide this model.

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